The scourge of LTO’s idiotic schemes

If there’s one thing Aquino administration officials are good at, it is their penchant for coming up with schemes to either make things life harder for our poor countrymen or squeeze more money out of ordinary Filipinos, all in the guise of “public welfare.” And no one exemplifies this better than Land Transportation Office (LTO) chief Alfonso Tan, Jr.

Recently, Tan came out with a harebrained plan requiring first-time applicants for driver’s licenses as well as those renewing their professional drivers or conductors’ licenses to first secure an NBI and police clearance supposedly to prove that “the applicant has not been convicted of any offense involving moral turpitude or reckless imprudence resulting from reckless driving.”

Everyone knows that getting an NBI or police clearance takes a lot of time and money. Aside from losing a day’s wage, professional drivers and conductors also have to shell out money for government fees, transportation and other incidental expenses.

Not only is the LTO placing an additional burden on ordinary workers, it is also imposing arbitrary (and illegal) conditions for the issuance a professional driver’s license. The LTO chief, who is also a lawyer, knows full well that, under the Land Transportation and Traffic Code, a person can be denied a professional driver’s license only if he or she is “suffering from contagious diseases, such as tuberculosis, sexually transmitted diseases and epilepsy or who is an alcohol or drug addict or dependent.”

There is no law whatsoever prohibiting a person who has been “convicted of an offense involving moral turpitude or reckless imprudence resulting from reckless driving” from being issued a driver’s license. For Tan to impose additional conditions beyond what the law provides is not only a blatant abuse of his rule-making power, it also constitutes a “corrupt practice” under the anti-graft law for “causing undue injury to private party.”

Another half-witted plan of the LTO is the “Reformed Compulsory Third Party Liability (CTPL) Insurance System Project.” The LTO wants to appoint two private insurance companies – one for odd-numbered vehicles and another for even-numbered vehicles – to issue CTPL insurance for all motor vehicles nationwide. In short, the LTO wants two “lucky” insurance firms to control the sale and issuance of CTPL policies throughout the country.

The CTPL is a mandatory insurance policy required by the Land Transportation Office (LTO) in order for a vehicle to be registered. It is purchased by a vehicle owner to compel the insurer to pay for the damages caused to another (a third) party due to the vehicle owner’s fault.

Under the LTO plan, this insurance “duopoly” will not only control the P8.3-billion market for the yearly CTPL insurance, they will also be allowed to charge vehicle owners for insurance premiums at the rates they want to. In short, vehicles owners can no longer choose who their insurer will be.

Not only that. This insurance duopoly has been authorized to charge other insurance companies an “administrative fee” for managing the insurance system. And who do you think will end up shouldering this fee? Well, vehicle owners, of course.

Clearly, the scheme guarantees the insurance duopoly (or system “administrators,” as the LTO calls them) huge profits for very little effort and minimal investment. “Tubong lugaw,” as ordinary folks would say. Worse, being private funds, these monies are not subject to public audit. How much goes to whose pockets will be beyond prying eyes.

This insurance system project is ill-timed, to say the least, especially with just 6 months left before PNoy bows out of office. Why not leave this matter to the next administration to sort it out? The more LTO insists on pursuing this “reformed” project, the more it looks like a moneymaking racket by LTO and DOTC officials, given that the national elections is just around the corner.

This is not the first attempt to centralize the CTPL business. If we remember it right, in the late 1970, President Ferdinand Marcos’ created the Philippine Motor Vehicle Liability Pool, which was managed by a consortium of private insurance companies together with the Government Service Insurance System (GSIS). The consortium eventually went bankrupt because of fraudulent practices, with the pool funds mysteriously disappearing.

In the late 2000’s, the GSIS, under its then president and general manager Winston Garcia, again tried to monopolize the CTPL business but this was met with widespread opposition by vehicle owners and insurance companies.

Will this new LTO scheme finally solve the problem of fake insurance policies, fly-by-night insurers, etc.? Obviously not. Not while fake or fly-by-night insurance providers continue to ply their trade near or inside the LTO offices. Besides, in this day and age of the Internet, there are surely consumer-centric and cheaper but equally effective solutions to address these problems.

What is undeniable, however, is that nothing good ever happens when government dips its fingers into private business, more so in this instance where neither the LTO nor the DOTC has bothered to explain how this “reformed CTPL” would be different from its failed predecessors.

9 Comments

The LTO Chief may be wrong in imposing conditions beyond what the law requires. However, should we keep renewing licenses of professional drivers who have a been convicted once or multiple times of reckless driving that resulted in loss of lives and property? How do we protect the safety of the public? Isn’t it better if these persons are denied a professional driver’s license?

I have been at the receiving end of what I consider LTO’s oppressive and palpak schemes, namely the RFID stickers that never took off (for which I did not get a refund) and the more recent mandatory license plate replacement which, with barely just a month to go till my renewal schedule I have yet to receive, despite being pre-paid on the date of my last motor vehicle registration renewal. I’d say, these are signature evidences of how this administration of PNoy is exploiting the ordinary Pinoys.

The main problem of Noynoy is his best friend Abaya. This Abaya is responsible in our public transport system Mrt Lrt and also our airports and the worst is LTO. This Abaya must must be terminated ASAP. Together with Abad ,Abaya is the worst person working for this administration. You guys must be ashamed of yourselves . You have brought tremendous hardship to the Pilipino people. You have the chance to have a legacy to this country but you messed it up. You will be leaving with a very bad image. Pilipinos will look like a dirt. So bad ,you had your chance.

Why not imitate some systems in-place in gov’t. agencies like BIR in particular. Printers and CPAs are accredited and is posted in the website so that if LTO wants to replicate the idea, insurance companies can do the same, get accreditation from LTO or DOTC.

This is common sense especially for lawyers and systems analysts. Why is it that gov’t. is placing incompetent thinking persons in public service? baka wala pang civil service eligibility iyang mga iyan e.

THANK YOU VERY MUCH, SIR DUILAY FOR THIS INFORMATION YOU HAVE WRITTEN IN YOUR COLUMN TODAY:

“Not only is the LTO placing an additional burden on ordinary workers, it is also imposing arbitrary (and illegal) conditions for the issuance a professional driver’s license. The LTO chief, who is also a lawyer, knows full well that, under the Land Transportation and Traffic Code, a person can be denied a professional driver’s license only if he or she is “suffering from contagious diseases, such as tuberculosis, sexually transmitted diseases and epilepsy or who is an alcohol or drug addict or dependent.”

“There is no law whatsoever prohibiting a person who has been “convicted of an offense involving moral turpitude or reckless imprudence resulting from reckless driving” from being issued a driver’s license. For Tan to impose additional conditions beyond what the law provides is not only a blatant abuse of his rule-making power, it also constitutes a “corrupt practice” under the anti-graft law for “causing undue injury to private party.”